The East Midlands has seen a rise in equity investment, reaching £125m in the first three quarters of 2024, according to the British Business Bank’s latest Small Business Finance Markets report.
It marks a 25.5% increase in investment value compared to the same period in 2023 despite the total number of equity deals dropping by 14.9%.
Across the UK, half of all nations and regions reported growth in equity deal values, even as market conditions remained challenging.
The proportion of smaller businesses using external finance declined from 50% in late 2023 to 43% by mid-2024, reflecting tougher economic circumstances.
Despite smaller businesses contributing 52% of total UK turnover, their investment levels remain lower than those of larger firms, which invested an estimated £27.7bn in 2024—more than twice the £12.3bn invested by smaller businesses.
Factors such as limited capital availability and higher borrowing costs contribute to this disparity.
Vicky Mears, director of UK Network—Midlands and North of England at British Business Bank said: “This year, we saw a strong increase in the value of equity investment that smaller businesses across the East Midlands are receiving, which represents our significant support of the entrepreneurialism and high growth potential that these businesses are showcasing.
We look forward to playing an ever more active role in supporting them as they grow and thrive. However, if we are to achieve the growth we all want in the UK economy, it is important that we continue to make the case for business investment which can help drive the economy, lift wages and improve living standards.
“The overall findings from this report further emphasise the need to ensure smaller businesses across the UK’s Nations and regions have better access to the finance they need to invest. “
Challenger and specialist banks continue to dominate small business lending, accounting for 60% of gross lending in 2024, the highest level on record.
Of the £62.1bn loaned to smaller businesses, £37.3bn came from these banks, outperforming the UK’s five biggest banks for the fourth consecutive year.
